22/05/2008

The close relationship between an economy?s capacity for innovation and advanced technology sectors is described in the new study by the Foundation for Economic and Industrial Research (IOBE). According to the study, the development of advanced technology sectors, even though it does not automatically translate into an innovative result, can mobilize resources, skills and knowledge into other sectors through products and service, thus allowing for improved innovation performance across the economy.

The study incorporates data of the European Innovation Scoreboard 2007, according to which Greece is among those countries that are significantly behind compared to the EU-27 average. Greece is in 20th position on the European list for innovation. The Greek economy relies heavily on the transfer of technological skills and innovations from abroad while the national environment does not seem to have the necessary conditions for the reinforcement of domestic innovation. The 4th Community Innovation Survey reveals that, on a sector level, the leading sector in Greece is Information and Communication Technology. 35% of Greek businesses experienced technological innovation activity during 2002-2004, while 35.1% successfully introduced at least one technological innovation to the business. 25.1% launched a new product or service (product innovation), while 31.8% displayed innovation in procedures.

The IOBE study points out that the knowledge leading to innovative behaviour not only concerns those sectors which have an intense technological content, but is equally important in traditional sectors of the economy (food, non-metallic minerals, etc). In these sectors there are years of accumulated knowledge which is utilized, at times in a systematic way, but at other times in a non-systematic way, thus leading to ?hidden innovation?. Subsequently, innovation does not have a strictly technological identity. Greece displays an overall low performance in technological innovation, but higher performance in non-technological innovation.

Therefore, a contradictory image arises: on the one hand, Greece?s low performance in basic indicators reveals that the major parameters in the national innovation system are lacking compared to most developed countries. On the other hand, according to the definitions adopted on an international level, regarding the innovation performance of businesses, Greek businesses seem to be innovative. This discrepancy can be explained by the common strategies of Greek businesses to settle on assimilating innovation without spending resources on its development. Adversity to the cost of experimentation required by the innovation procedure as well as the need to allocate resources in risk-related activities, without short-term results, inhibit the promotion of innovation in Greece.

At the same time, advanced technology sectors in Greece have been developing rapidly in recent years, with more than 26 000 businesses which are active in advanced technology sectors. According to the IOBE study, these sectors have entered a magnitude phase and can constitute new sources of development for the Greek economy on the whole.

Regarding public policies, the study concludes that the numerous direct policies for innovation that have been applied are not sufficient. The poor performances of basic indicators show that they have not brought about broader results. Thus, an issue arises as to whether a country such as Greece can simply rely on good output through incorporating the knowledge produced elsewhere, without taking part in the production procedure. Thus, direct policies must focus on rewarding and projecting the outputs from the national innovation channel. What is however critical in order for the Greek economy to converge with other developed European economies on this level, is the overall orientation of policies towards innovation. This would bring about a socioeconomic environment which is more innovation-friendly. Finally, indirect policies (i.e. business policy, education policy, etc.) must be established so as to support the ability to absorb new actions and innovations.

Source: IOBE